Author: Dr. Daniel Levine

4 Important Retirement Savings Tips for Women

Women face additional challenges when planning for retirement. By being aware of these concerns, women can take steps to overcome them. 1. Longer Retirement Women usually have a longer retirement than men because they outlive their husbands by about five years, according to the National Center for Health. This means women must save more because they will have more years in retirement due to their increased lifespans. As people age, they typically reduce the ratio of stocks to bonds in their investments; women should discuss with their financial advisor how much of their resources should stay in stock investments during retirement to diminish the effect of inflation. 2. A Woman’s Retirement Is More Expensive Because women live longer, it is wise to expect higher expenses such as additional medical costs, or the increased possibility of having to stay in a nursing home, an assisted living community, or employing home-care which can be very expensive. While Medicare may cover some of these expenses, now is a good time to look into long-term care insurance or other forms of insurance protection. 3. Women Earn Less so They Must Save More It is well-known that women do not earn as much as their male counterparts. According to the U.S. Census Bureau, a woman earns about 80 cents for every $1 a man earns. In addition, women sometimes miss some of their working...

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Are Financial Advisors Worth the Money?

Low-fee investing can be a two-edged sword because while no one likes to pay fees that compromise their portfolio’s continued growth, there is also wisdom with having an experienced and trained financial advisor. The money you spend in fees could very well result in returns that replace your good investments with great investments and change your retirement lifestyle from sufficient to comfortable. When it comes to deciding whether or not to hire a financial advisor, there are two main factors to consider. 1. First, you have to decide on the kind of financial advice you need. Research shows that advisors can add value in two different ways: they can be very helpful with managing your investments, and they can provide expertise with financial planning. Of course, the value of these benefits depends largely on each investor’s individual situation, experience, and knowledge.  The quality of the advisor you select is critical because there are a wide range of abilities, qualifications, and costs.     Working with an investment advisor makes sense if any of these fit your circumstances: ·         You have a large amount of money in your investment portfolio ·         Your finances are complicated in the areas of retirement, taxes, and estate issues ·         You lack a sophisticated knowledge of investing ·         Your time is limited or you prefer to spend your time on other tasks and pleasures 2....

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Aggressively Monitor Your Investments…

…Or Pay Someone Skilled To Do So When markets are rising and amateur investors are doing very well, it’s easy to forget that protecting your assets during declining markets requires skill, discipline and constant attention. Investors need to expect and be prepared to react to fast-moving markets. No market rally is permanent and no decline lasts forever, meaning there are no investments you can buy and forget about, which many amateur investors tend to do. The pace of change in today’s markets is too great for investors to be complacent. The list of 30 individual companies that compose the Dow Jones Industrials, which are some of the largest publicly traded companies in the U.S., has changed numerous times since the Dow’s inception in 1896. Companies were removed as they declined, were acquired, went private, or simply went bankrupt, and others took their place. This is an example of the constant state of change in the markets, even among giant companies. Investing with long-term assets is not child’s play since most investors can ill-afford to lose part of their nest egg. Today’s markets are no place for dabblers that lack the time, patience, training, discipline, and diligence to do the research and invest properly. If you aren’t completely sure you have the time, expertise and experience to manage your investments clearly and with a defined purpose, it may be wise...

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Learn From Your Mistakes

One of the key differences between successful long-term investors and those who aren’t is that successful investors learn from their mistakes and make a commitment to never making the same mistake again. Even when a mistake results in a large and painful loss, it’s necessary to take a step back and review the actions that led to your loss. Learning what went wrong in your thinking or your planning must be reviewed so you can educate yourself on what to do better next time. Also, never compound the errors you made by taking bigger risks in an effort to recover your money. This is addictive gambler’s behavior, not rational and emotionless investing, which is the best way to make decisions. Determine where you went astray and ensure you avoid the same mistake in the future. Many common investing mistakes can be attributed to emotional decision-making. Whenever you make financial or investment decisions, you will have the challenge of overcoming fear and greed. Fear can cause you to run for the exits when markets decline or your portfolio starts taking losses. Greed can encourage you to chase fads and take on too much risk in the pursuit of a big score. By recognizing your emotional triggers and engaging your rational mind, you can overcome your impulses and cultivate discipline. Taking unnecessary risks can quickly destroy your portfolio. In today’s markets,...

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Portfolio Performance and Measurement Reporting

Do you receive regular portfolio performance reports (not account statements) that clearly measure your performance against the appropriate benchmarks and disclose exactly what you pay for the performance of your investments? In order to make good financial decisions, it’s important to remove emotion from the picture. The only way this can be done is to: Set clear and realistic goals Create meaningful measurement Have defined consequences for failure Most investors do not set clear and realistic goals…so there is no meaningful measurement, and no defined failures or consequences.  This contributes to decisions being emotional in nature, which is often a potentially devastating flaw.     Set Clear and Realistic Goals; Have an Investment Policy Statement An Investment Policy Statement (IPS) should contain at least the following information: The time horizon for your investment strategy The income needs from your investment amount A decision-making policy for how investments will be made An asset allocation (diversification) model your investment will follow A provision for how frequently and how your investments will be monitored and reviewed A realistic rate of return goal which is relative to an appropriate benchmark Without an IPS, there is no clear communication about what is expected and how those expectations will be met. Investing without an IPS is like driving across a foreign country with no map, no directions, and no preferred destination. It could be an...

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